Microsoft to drop Windows 8.1 licensing costs by 70 percent

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Microsoft reportedly plans to slash as much as 70 percent off the Windows 8.1 licensing costs in a bid to better compete against rivals.

Windows 8.1 has not enjoyed the same popularity as previous iterations such as Windows XP or Windows 7, and it received plenty of criticism from users. While it addressed some of the most annoying issues Windows 8 brought along, the latest version is still not very popular. A massive price cut may help drive a wider adoption, as well as help Microsoft in competing with rival companies that offer low-end, cheaper products such as Chromebooks.

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"Microsoft Corp. is cutting the price of Windows 8.1 by 70 percent for makers of low-cost computers and tablets as they try to fend off cheaper rivals like Google Inc.'s Chromebooks, people familiar with the program said," reveals a new report from Bloomberg.

According to the report, manufacturers will need to pay only $15 to license Windows 8.1 to install it on devices that cost less than $250. Considering that the current fee is $50, the price cut would definitely be welcomed by low-end device manufacturers.

The discount will reportedly apply for any device, without restrictions on size or type, as long as it meets the price limit requirement (less than $250). Microsoft is yet to make an announcement in this regards, but if Bloomberg's sources prove to be correct the discount could take effect in the coming weeks.

The latest Windows version is optimized for touch, but devices don't necessarily have to be touch-compatible in order to pass logo certification. While Windows 8 has sold more than 200 million licenses since its debut, the adoption rate is still arguably slow compared to Windows 7, which is now seen as the next Windows XP in terms of popularity.

As Bloomberg points out, Microsoft faced stronger competition from Google and Apple last quarter and saw its revenue decline at its devices and consumer licensing division, which includes Windows software. New and more attractive incentives such as this notable price cut could allow Microsoft to help OEMs boost the production of Windows-based tablets and other devices that fit the low-end price category. At the same time, it could help the company better compete against Chromebooks running Google's Chrome OS, which are cheaper than most Windows-based laptops and tablets.